Sydney area hail storm loss passes A$871m

21st January 2019 - Author: Artemis

The loss to insurance, reinsurance and some ILS fund interests from the recent major hail storm and severe convective weather outbreak that hit the Sydney and surrounding area of Australia in December has risen, with the industry impact now above A$871 million.The hailstorm system hit the Sydney, Central Coast and South East Queensland region of Australia on the night of December 20th 2018, with residential and commercial properties and auto’s all seeing damage from the large hail impacts.

Two of Australia’s largest insurers, IAG and Suncorp, were quick to say that their reinsurance programs would likely be triggered by the hail losses, to help them pay their share of claims.

There could also be some minor attrition to reinsurer sidecar vehicles that are exposed as well, we understand.

Now, the Insurance Council of Australia (ICA) has raised its estimate of insured losses for the hail storm, pegging them at just over A$871 million.

The ICA said that insurance firms have received 99,638 claims from the hail event so far, which includes 71,475 motor vehicle claims, 22,057 home building and 4563 contents claims.

As the industry loss rises the chances of this eating into December ILS funds increases, for those that have exposure to the hail storm.

As we said before, the Sydney hailstorm loss is expected to have some level of impact to the portfolios of mutual ILS funds from Stone Ridge and Pioneer, as well as some of the larger ILS players which have direct exposure to Australian primary insurers.